The Postal Life Insurance (PLI) policy holders in Jammu and Kashmir are confused over the decision of Postal authorities to resume 10.50 per cent service tax in violation of High Court orders which had stayed collection of the levy pending the outcome of a petition.
"We started paying the service tax last year and after about nine months, the post office authorities in February this year said we do not have to pay it anymore as High Court has issued a stay on it," Bashir Ahmad, a policy holder said.
He said while the petition is still pending disposal before the High Court, the Department of Posts has again demanded that 10.50 per cent service tax be paid with the policy premium.
Chief Postmaster General, Jammu and Kashmir Circle, Chander Prakash admitted that the service tax was being charged from the policy holders although the court had not vacated the stay.
"We are not taking any payments from those who have petitioned the High Court. Rest we are charging the service tax," Prakash said.
He said his office was waiting for a response from the Department of Posts, New Delhi, on the issue. "The matter is likely to be settled in a week's time," he said.
The employees of the postal department in the state are also worried over the "arbitrary" service tax charged on policy premiums saying "we can lose a lot of business".
"If immediate measures are not taken to reduce the tax percentage, there will be mass surrender of policies, besides negative effect on getting future business," secretary of state unit of National Association of Postal Employee, F A Reshi, said.
